The biggest problem with debt when you’re a business owner is how much of your time and energy gets sapped worrying about money. When the big boys get bogged down with debt, they strategize. And they take action. Sometimes a radical solution is necessary, like a business restructuring (Chapter 13 or Chapter 11 bankruptcy). Other times, working with a credit counselor may be all you need.
Credit counselors can help you set up a workable budget and repayment plan. You write one monthly check to the credit counseling service and they divide the money up among your creditors. Your budget may seem tight at first, but you will find you could be completely debt free within three years. Most credit counselors work with your creditors to get them to accept smaller payments from you, and attempt to freeze or lower interest rates and late payment or over-the-limit fees. In addition, once you’ve entered into a repayment plan with the counselor, the harassing phone calls from creditors will stop.
Before you sign up, though ask these questions:
1. Which of your creditors have worked with you in the past to reduce payments, or freeze or lower interest and fees? Make sure they have experience with your creditors.
2. When will my creditors be paid? Some counseling services have a set date each month when they pay creditors. Your creditors could wind up being paid after their due dates. Make sure the counselor can get your creditors to change the due dates.
3. Can I pay you electronically or do I have to send a certified check or money order each month? You’re much more likely to stick with a repayment plan if making that single payment to the counseling service is a “no-brainer.”
4. How often can I see statements of my accounts? Your counselor should send you at least monthly reports on your progress.
5. Will I always deal with the same counselor and will I hear back promptly if I leave a message? Make sure you’re comfortable with the answers you get, and that you’re comfortable with the people you might be dealing with.
There’s no obligation or payment due to any good credit counselor until after you’ve determined what your monthly payment would be under the plan and you’ve decided to join their program. I encourage you to explore all your options and then pick the one that makes you feel most comfortable
Paula Langguth Ryan is a mediation and marketing maven, specializing in financial issues for small businesses. She’s the creator of the Supersonic Prosperity Oriented Copywriting System http://www.paulalangguthryan.com/shop/supersonic-copywriting/ and provides strategic financial consulting services to small business owners. She’s also the author of Bounce Back From Bankruptcy: A Step-By-Step Guide to Getting Back on Your Financial Feet and the forthcoming Break the Debt Cycle – For Good! You can follow her on Twitter at copytamer and get free resources at www.paulalangguthryan.com. If you need help or assist please email us at firstname.lastname@example.org.